HPYT sells call options on its securities holdings, which consist mostly of 20-year US treasury bonds. Long-dated bonds are very sensitive to interest rate moves, and tend to decline if rates rise, and vice versa. However, for various reasons (high debt, US currency aversion) this relationship has not been so clear cut recently. Also, bonds in general had horrible performance from 2022 to mid-2024 as the FED fought inflation. Bond performance 'should' get better if the US goes on an easing program as expected. The ETF can sell calls on 100% of its portfolio. This brings in additonal income, but the fund can lag a regular bond fund if there is a big rally. HPYT usually pays out more than it makes. This keeps income high, but can see net asset value decay. This is what has happened here. While indicated yield is 15%, 2-year annualized total return is just 1.84%. Since-inception compounded return is 2.42%. So, investors have made money (net) here, just not a lot. But that is largely true of all bond funds in the past recent period. We would say HPYT is performing as might be expected, considering its structure and recent market moves. Currency has also played a role, as it is not hedged, and the strength of the Canadian dollar has hurt returns (it is priced in C$ but holds US$ investments).
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